ATNM - Actinium Pharmaceuticals: The Trickle Down Continues And I Maintain A Buy

2023-11-03 18:08:52 ET

Summary

• Actinium Pharmaceuticals continues to make progress with their radiolabelled CD45 antibody Iomab-B, which has potential beyond market expectations.
• The main pipeline update is the presentation of findings in patients with TP53 mutation, showing improved overall survival with Iomab-B.
• Actinium Pharmaceuticals has a relatively stable position with $83 million in cash and 6 more quarters of cash on hand, but may need to tie a BLA submission with a public offering.

Topline Summary and Changes to the Thesis

Actinium Pharmaceuticals, Inc. ( ATNM ) continues to push forward with their radiolabelled CD45 antibody Iomab-B, and both my eyes are fixated on this part of their pipeline. Couple that with efficient stewardship of their cash flows, and ATNM continues to be a company I think has more potential than the market is expecting. At this market cap, I feel they're flying under the radar, and this article details some more of my reasoning on this matter.

Pipeline Updates

Iomab-B

Since my article back in September, not much has changed with respect to the pipeline. ATNM continues to hold its positive phase 3 trial results , with an important oral presentation of findings in patients with TP53 mutation being presented at this year's ASH meeting . It's worth noting that oral presentations tend to be filled with abstracts deemed to be impactful in their respective fields, providing some indication as to how important the ASH committee finds these results.

However, we already know the main results from the press release. Providing Iomab-B after bone marrow transplant yielded overall survival of 5.49 months compared with 1.66 months in patients who did not receive Iomab-B (presumably they did receive a transplant, however).

In absolute terms, this is definitely an incremental gain. Patients need to go through quite the battery of treatments to gain just under 4 extra months, but AML, particularly with the TP53 mutation, is just that dire a situation for patients. Interestingly, outcomes for patients with OR without TP53 mutation appeared to be similar with Iomab-B, suggesting that it can overcome some or all of the negative prognostic impact of this mutation.

The research team is pushing Iomab-B hard. We just need to wait and see when the application for approval is coming. In their latest quarterly filing , they've indicated positive conversations with the FDA, and their goal has moved to filing a BLA in the first half of 2024.

All told, with these findings, an approval for Iomab-B in late 2024 is not out of the question, but I don't think it's coming much sooner than that.

Financial Overview

Per their Q3 2023 filing , ATNM held $83 million in cash and equivalents, with total current assets reaching $85.6 million. Meanwhile, their operating expenses were $14.4 million, which was down a bit from Q2 ($15.6 million). After interest income, the net loss was $13.3 million.

ATNM also sold another $2.8 million worth of shares to help offset the negative cash flow, bringing the total up to $13.4 million worth of shares sold in 2023.

With this burn rate, ATNM continues to have 6 more quarters of cash on hand to fund activities, which is the same as at the end of Q2. The company is clearly making efforts to make their funds stretch, and at this point their current assets might be sufficient to get them through an FDA decision before needing to go to the well.

That said, I suspect that they'll tie a BLA submission with a public offering in order to shore up their cash positions.

Strengths and Risks

ATNM continues to show more and more signs of life with Iomab-B, and the particular challenge of these TP53 -mutated AML patients might draw a good bit of attention from hematologists. Radiolabeled therapeutics have extra hurdles to clear with the FDA, which makes their guidance that manufacturing and chemistry control conversations with the agency seem to be going well. I don't have any clear signals that a BLA would fail with them.

That said, we still don't have a BLA. Until we do, the die is not cast for Iomab-B, and it's difficult to imagine another catalyst that could drive valuation for ATNM. This could be an important treatment option, but I doubt the FDA will give it that much special treatment, although the drug does have Orphan designation.

We need that BLA, and the cash is flowing out until then.

But something else to consider is the steep decline in share price since I shared my first perspective on the company. With nothing fundamentally changing (other than a pushback of the BLA), it makes it a bit easier to see this company as pretty cheap.

Bottom Line Summary

I recommended a buy for ATNM that was fairly tentative back in September. Now, with these new findings and the company on the precipice of submission, it's an easier recommendation for me to take. I think ATNM is very much worthy of consideration and a speculative position, with the caveat that nothing is certain for any drug, and we've seen lots go wrong with promising drugs at this final stage of the process.

Still, this company is very clearly flying under the radar to me right now. And it has led me to take my own small stake in the company.

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